Venture Capital

Venture Capital Basics

What It Is: Institutional venture capital comes from professionally managed funds that have $25 million to more than $1 billion to invest in emerging growth companies. Venture capital focuses on capital investments in private, young, fast-growing companies.

Appropriate for: High-growth, high-potential companies that are capable of becoming market leaders, and being profitable in five to eight years.

Best Use: Varied. From financing product development and commercializing promising technologies to building durable well-run businesses.

Cost: Expensive. Institutional venture capitalists purchase significant equity in a business. The earlier the investment stage, the more equity is required to persuade an institutional venture capitalist to invest. The range of funds typically available is $500,000 to more than $30 million.

Ease of Acquisition: Difficult. Institutional venture capitalists are choosy. Institutional venture capital is an appropriate source of funding for only a limited number of companies.

Source: National Venture Capital Association

Today's Most Read

News and Articles About Venture Capital

What a VC Insider Learned in the Past 10 Years About Startup Funding
Ask the Expert

What a VC Insider Learned in the Past 10 Years About Startup Funding

Our expert Bo Yaghmaie explains how entrepreneurs should prepare for the worst.
Bo Yaghmaie
Walk Into Your Pictures: 3-D Camera Maker Raises $16 Million in VC Funding
Photography

Walk Into Your Pictures: 3-D Camera Maker Raises $16 Million in VC Funding

Mountain View, Calif.-based Matterport develops technology that allow users to capture images and turn them into 3-D models that can be explored. A current application is providing a way for real-estate listings to be walked through.
Catherine Clifford
7 Ways to Leverage an App's Press Coverage with Investors
Finance

7 Ways to Leverage an App's Press Coverage with Investors

If you've already scored some good media coverage, use it to your benefit when trying to score funding.
Zach Cutler
Founders Are From Mars, Capital Providers From Venus
Investors

Founders Are From Mars, Capital Providers From Venus

Given their different views of the world, it's a miracle that they ever get together.
Peter S. Cohan
Have a Burning Business Question? Ask the Expert: Bo Yaghmaie.
Ask the Expert

Have a Burning Business Question? Ask the Expert: Bo Yaghmaie.

Assisting startups and major corporations with financing, Bo Yagmaie is looking to take entrepreneurs questions relating to VCs, funding and corporate formation.
Andrea Huspeni
Who Is the Right Investor for You? That Depends on Where You Are Now.
Finance

Who Is the Right Investor for You? That Depends on Where You Are Now.

There are five stages of new ventures. Each one will determine who you should seek funding from.
Martin Zwilling
6 Questions to Determine If a Potential Investor Is the Right Investor
Venture Capital

6 Questions to Determine If a Potential Investor Is the Right Investor

Entrepreneurs need to scrutinize potential investors as closely as investors study the potential investment.
Murray Newlands
Why I'm Glad I Didn't Take VC Funding
Bootstrapping

Why I'm Glad I Didn't Take VC Funding

While many entrepreneurs are clamoring to get their hands on some outside funding, some founders aren't really down with that strategy.
Aliza Freud
Consider Control and Voting Rights When Making Venture Capital Deals
Venture Capital

Consider Control and Voting Rights When Making Venture Capital Deals

Investors want to protect their stake, entrepreneurs want to keep control. There is room to negotiate.
Bo Yaghmaie
On-Demand Grocery Startup Instacart Raises $44 Million From Big-Name Investors
Sharing Economy

On-Demand Grocery Startup Instacart Raises $44 Million From Big-Name Investors

A cross between Peapod and Uber, Instacart allows customers to select items online from their favorite grocery stores and have them picked up and delivered by locals.
Laura Entis
Airbnb Co-Founder: If Rejection Slows You Down, Entrepreneurship Isn't For You
Leadership

Airbnb Co-Founder: If Rejection Slows You Down, Entrepreneurship Isn't For You

The apartment-rental platform is no stranger to controversy and criticism, but its founders say determination is everything.
Catherine Clifford
Presented by
Secure That First Investor, and the Rest Will Come
Venture Capital

Secure That First Investor, and the Rest Will Come

Venture capital's dirty little secret: investors don't like going it alone.
Uber Breaks a Record With Its Latest Funding Round
Uber

Uber Breaks a Record With Its Latest Funding Round

With $1.2 billion from Fidelity and others, Uber sets the bar for other private companies in VC funding.
Ray Hennessey
Jared Leto Is the Latest Celeb to Hop on the Entrepreneurial Bandwagon
Celebrities

Jared Leto Is the Latest Celeb to Hop on the Entrepreneurial Bandwagon

The Academy Award-winning actor and musician has invested in tech startup Zenefits, an automated human resources company.
Geoff Weiss